Installment plans are among the most commonly relied upon options for handling tax debt. While the IRS encourages high payments in the interest of settling debt quickly, this simply isn’t realistic for most people. Thankfully, IRS installment plans offer a variety of options that can be worked into sparse budgets. Read on to learn more keeping your monthly IRS installment payments to a minimum:
Cost of Setting Up the Installment Plan
Before you dig into the monthly cost of your installments, you’ll also want to understand how much, exactly, you’ll be expected to pay to get the plan up and running in the first place. This will largely depend on your current income, how you apply, and how you ultimately pay your installments.
As a low-income taxpayer using direct debit, you may enjoy waived setup fees. Conversely, applying by phone and paying with a credit card could result in fees of up to $225 before you even get started with your installments.
Negotiating Installment Payments With the IRS
You hold a large degree of control over how much you pay each month. As previously mentioned, the IRS encourages significant payments in the interest of getting your tax debt settled quickly. Many taxpayers are forced by touch financial circumstances to opt for lower payments, however.
If you select an amount the IRS deems too low, your minimum payment level will be determined by dividing the amount you currently owe by 72. Typically, taxpayers who owe less than $10,000 enjoy greater leeway regarding minimum installment payment amounts, with no specific minimum necessarily required.
If you’re determined to keep your IRS installments low, you can benefit from the assistance of a tax expert. You can count on the Highland Tax Group for help. We can negotiate on your behalf to obtain an installment level that fits into your current budget. Reach out today to get started.